CL-2022-000676 - [2025] EWHC 2486 (Comm)

The offer, having passed Technical, was advanced to Closing.

On 13 June 2020, Nick Graham of Closing emailed Mr Page. He wrote, subject to contract, setting out various proposed details, including in relation to delivery and he attached the “latest version of the DHSC order form”. He added that “Red highlighted sections are for DHSC to complete, yellow sections are to be agreed, and blue sections are for you to verify/complete as necessary.”Section 3 of Schedule 1 regarding quality assurance standards was marked yellow, with the relevant standards to be inserted, and for the box with yellow highlight to be ticked if applicable (which it was). The attachments also included Schedule 2.

After speaking with Mr Graham on 14 June 2020, Mr Page set out his record of their conversation in an email to Mr Graham. He sent two Dropbox links for the two proposed factories in Medpro’s gowns offer: WTT and Kunshan which Mr Page said were both on the whitelist and for which information had been sent to Mr James previously. Mr Page requested that Mr James confirm that all was in order as “Nick is keen to conclude matters today”. He also emailed Mr Graham providing him with the same details for the two factories, requesting that he too check and confirm that all is in order. He added: “For the avoidance of doubt if we only have one factory that has been signed off we can allocate more production capacity to the NHS and still can make our delivery schedule”.

Mr Graham responded later that evening explaining that he was “progressing with the order form and product registration” but that he had not been able to find evidence that the “technical approvers” had seen the certifications for Kunshan. He asked Mr Page to forward the technical documents so that he could “try to push these through”. In the meantime, he explained, he was “populating the order form with that information where possible” and, pending a response from Technical, hoped to send the completed order form by midday on 15 June 2020.

Shortly thereafter Mr Page sent through product packs for both factories. Mr Graham confirmed receipt and added that was trying to find out if Technical had also approved Kunshan. Shortly thereafter, Mr Graham emailed Mr James noting that the Mendix entry only covered WTT, and the QMS [quality management systems] for the sterilisation company/process. He stated he would confirm with Mr Clarke if he had done technical assurance on the second manufacturer. Mr James stated that Medpro had only ever sent over the first factory, and that they “have form for wanting to submit multiple factories after the event but they also recognise that the second factory will need to go through QA as well”.

Mr Page also emailed Mr Graham, stating he would send through a screenshot showing the Kunshan Jiehong factory to be on the whitelist. He submitted two screenshots, one in Chinese, and one bilingual which show the factory on a list, though the title of the list is not apparent.

On 15 June 2020, Mr Graham submitted the proposed deal to purchase 50 million sterile surgical gowns for £275,550,000 (ex VAT) (£5.50 per unit) for approval by the Deals Committee.The products and quantity were described as “50 million Sterile surgical gowns compliant to EN 13795-1:2019”. The form further states:

“Both manufacturers are on the ‘White List’, however only the first (Wujiang Tutaike) has passed technical verification. This will be carried out with the MOD QA team prior to any order being placed.

The supplier will carry out ongoing factory inspection – representatives of [Medpro] will conduct inspections of the factory to review material compliance and process verification. This audit process is not contracted to a 3rd party, but carried out by their personnel. Inspection/ Verification & QA – before any goods leave the factory the [Medpro] compliance team is on hand to conduct a through [sic] inspection of the product, inner and outer packaging and ensure that the proper certification accompanies the goods through to export. Whilst many exporters and international clients rely on third party inspections such as SGS, [Medpro] conducts this aspect internally. It is not proposed to undertake further DD given the process and procedures put in place by [Medpro].”

Mr Graham informed Mr Page of the submission and asked: “I’ve still not seen anything on approval of the second factory; if that turns out to be an issue is there any chance of doing the full deal with Wujian [sic] or is there insufficient capacity?”. Mr Page’s response was that “We can do the full capacity at Wujian [sic]”, (i.e. at WTT). His email said that Medpro had “a 100% record on quality and delivery, we are superb at managing every situation as it comes up.”

Later on 15 June, Mr Graham for the first time sent the draft order form which he had populated as much as possible. He asked Mr Page to complete and check that he was content with the draft, especially sections highlighted in blue. Mr Graham reiterated that sections highlighted in yellow were still to be agreed and noted that he did not yet need a signature from Mr Page as the annex with full specification needed to be added. By that stage, section 3 of Schedule 1 on quality assurance standards contained the single code EN 13795-1:2019. Mr Page replied to this, stating that “Everything looks 100% correct”, and reattaching the order form which he had signed.

On 15 June 2020, there were then several internal PPE Cell emails relating to the Medpro offer. These included Diane Neilsen asking when TLT review is expected. The Closing committee met late that night. The minutes are redacted but apparently shows that no decision was reached. Concerns were expressed as to whether there was a need for such a large order of sterile surgical gowns and also as to a large order to a new company. There were also issues about Medpro being a small company and using a factory that had not been checked – Kunshan. In the event, the message was passed back to Medpro to see if it would reduce the volume to be supplied from 50 million gowns to 25 million gowns “not sure that our demand signals is as high as previously thoughtwhich does give us an opportunity to present an alternative deal — if you could provide a total of 25m gowns with deliveries going out to the end of July, it both reduces the DHSC financial exposure and gives us more flexibility in warehousing and distribution”.

Mr Page was understandably disappointed by this news, and replied in terms that stressed Medpro’s competence and reliability: “We have all been in business together for over 20 years, we have 100 people on the ground in China and supply retailers and Governments all over the world. PPE Medpro was specifically set up to supply the NHS in the UK only. … We want to reassure the NHS that we always deliver 100% quality and on time.” He goes on to ask what more was needed “to get this over the line”.

On 17 June 2020, Mr Graham and Mr Page spoke by phone. Mr Page said that Medpro was content to proceed with the reduced number of 25m gowns at a unit price of £5.50 sayingif he felt the order “will go through at 25 million units I will convince the team. Our margin will be tiny at 25 million but I can sell it to them hoping that a 2nd order will come after this one”.

Mr Graham relayed this to Mr James, cc-ing Mr Townsend and a Rachel German. A little later, Mr Beard emailed Mr Graham with news that: “This was approved tonight.” In fact, the minutes of that meeting state something rather different, namely, that it was approved, but “subject to demand”.

Later Mr Graham emailed to tell Mr Page that “The deal was approved at the committee tonight, so I’m just revising the order form and will get the updated draft over to you asap. I know you’re aware of our process, but for the sake of completeness I always remind suppliers at this point that deal approval doesn’t necessarily mean DHSC will approve the contract. I can’t see any reason why it would be rejected having got to this point, but I can’t make any guarantees”. That reflects the fact that on the documents it was a conditional approval, “subject to demand”.

Mr Graham attached an Order form and other contractual documents requesting that if Mr Page was willing to be bound by these, he should return a signed copy of the order form, which would be submitted to DHSC for consideration and potential approval. The factory table on page 4 of the Order Form records the product description as “TKK-C01 Sterile Surgical Gown” and the only factory listed is “Wujiang Tutaike Textiles & Finishing Co., Ltd”. Medpro relies fairly heavily on the contents of this document, in particular:

Mr Graham later noticed a minor error in a table in section 6 of the order form, whereby he omitted to sum up the total values for each size. He re-submitted an updated version of the form.

Early on 18 June 2020 Mr Page sent Mr Graham back the contract signed by him on behalf of Medpro.

On the same day, Mr Graham emailed the Finance Team requesting a Purchase Order to be raised with Medpro for the purchase of 25m WTT sterile surgical gowns at a total cost of £137.5m. He included as part of the submission pack a “Request for approval of spend against HMT Delegated Funding”. Against the box entitled “What certifications are applicable to this order? (E.g. CAPA, CE/EN certificates?)” it was written:

“Technical specifications incorporated in to draft contract and technical clearances attached in submission - they are also on Mendix”

Against the box entitled “What evidence is there that stock meets this certification?” it was written: “MOD QA confirmation attached - also on Mendix”. It was also stated that “The Governance Board has approved this submission.” Then, against the box entitled “Description of goods (including sizing and technical certification)” it was written: “This order would secure 25 million sterile surgical gowns, compliant to EN 13795-1:2019 in a range of sizes from XS to XXL, delivered ex-works to Uniserve representatives in China.”

Mr Graham also included a document called “PPE Closing Team Contract Management Plan (CMP) & Handover Key Notes”. It had a box called “Contract Delivery Terms” on the first page. That had three options and only the box “Delivered ‘Ex Works’” was checked.

The screenshot of Mendix showed, in the “Approval” section, that the decision was “Progress”, and the comment box populated as follows:

“MoD Tech Assurance Review – 12/06/2020 - ACCEPT

Confirmation received from MHRA that products may have CE mark affixed. "Certificate of Free Sale for Exportation" (MHRA ref:…”

It seems that at about this time, the Medpro “Submission to DHSC Checklist v4” was completed within the PPE Cell. There were several headings, one of which was “Technical Approval”. Under that heading, “Technical Approval” was confirmed, and it was indicated that the “Technical Documents” were in the order form and: “Technical specification or similar for all items in scope; Timestamped pictures of the equipment (where available), Appropriate medical certification”

On 19 June 2020, Mr Graham emailed Mr Page explaining that:

“I’ve just heard that there is a meeting at 1pm to discuss the demand for gowns, and I've heard a hint that they may be looking to cancel some orders if we have enough quantities coming in. With this in mind, I feel obliged to warn against making any commitments until you get a fully signed contract, as it would be at your own risk. I'm not trying to gently break any news here; I simply don't know what will happen this afternoon but there are differing views on the incoming stock vs. potential future orders vs. actual and forecast usage stats?”

In response, despite Mr Graham’s warning that the contract had not yet been approved, Mr Page said that “As soon as we had committee sign off on Wednesday we bought the production capacity for 25 million units. There is now a huge cash outlay from our side and we are not taking any deposits up front to help the NHS. The majority of companies are taking deposits upfront. The delivery dates are extremely tight as you know so that’s why we had to go ahead”.

Mr Page chased repeatedly emphasising that Medpro had now gone beyond the point of no return and that to secure the contract the price was up for discussion. In the evening of 19 June he pressed his case thus:

“As you know, we understood the contract sign off to be a formality and due to the tight timetable, we have already committed a huge amount of capital to materials, packaging and production capacity to ensure we meet the deadlines. We have already agreed to a deal on the basis of no deposits and a competitive pricing arrangement, which left us with a considerable cashflow commitment and a tight margin. In order to secure the contract and protect our outlay we can move to an absolute best price per gown of £5.18. To be clear, this removes our margin entirely and is now priced to ensure we deliver what we have committed to. Our production schedule is attached. … Our schedule and pricing is [sic] based on both approved factories and twice weekly collections as a minimum”.

Mr Graham responded stating: “I have a concern that your proposal includes both factories – while both are cleared to export from China, only one has currently passed technical approval, so I don’t know how this could affect things.” Mr Page replied: “They are both definitely approved and cleared for use. They were both noted on the original contract when we were discussing an order of 50m units”. Mr Graham replied that he had not initially received any documents relating to the second factory, and promised to double-check: “if you remember I didn’t initially have any documents relating to the second factory, and therefore when we reduced the order volumes it was for a single factory”. Mr Page then reverted: “Both factories are definitely approved at all levels as they were both noted and included on the first proposed contract when it was potentially an order for 50m gowns”.

Mr Page later sent all the documentation which he said showed that the second factory is “fully compliant”, stating “I believe all of this has previously been provided as this factory was on the draft contract when the gown order was 50m. Also included is the business licence. There should be no obstacles for this factory now. Can you please check this is all in order and we can have factory 2 on our 25m gown proposal? Clearly time is of the essence”.Attached were several Chinese documents and screenshots of online portals.

At this point Mr Page engaged his “big gun” – contacting Baroness Mone who then took up the fight on behalf of Medpro direct with Chris Hall from the Cabinet Office threatening further escalation. Baroness Mone was plainly of the view that there was a contract; “the committee sign off, the finance sign off, the verbal conversations on the urgency of goods and the signed returned contract, all constitutes a contract, with a legal and moral obligation on DHSC”. DHSC responded that the whole matter still remained subject to contract and that Medpro’s decision to commence production was theirs alone.

Between 19 June 2020 and 24 June 2020, there was then considerable to-ing and fro-ing within the PPE Cell as to whether to proceed with the Medpro offer and if so whether one factory or both. Inter alia there was some discussion about whether sterile gowns were a COVID requirement at all. Nonetheless, the Medpro offer was still proceeding.

Mr Graham was also chasing on whether Technical would approve the proposed second factory, Kunshan. Mr Page had sent through various materials through to Mr Graham in respect of Kunshan. He then wrote to Baroness Mone claiming that “As you know we were told that this factory was approved, it was on our order for 50 million units so we are a bit confused […] Tomorrow we will submit our best price. As I said our margin will be tiny or possible nothing at all as we have bought all the production capacity upfront. We really need to achieve a positive outcome to this extremely disappointing situation”.

In the morning of 22 June 2020, Mr Page emailed Mr Graham with a new proposal in the following terms:

“The great news is that we can deliver 6 million gowns by 30th June with the balance of 19 million gowns provided by the end of July. We can do daily or weekly pick-ups. Our revised production schedule is attached. Our price is £4.88 and this is now priced to minimise our exposure and the costs we've already funded. Our quoted price now is simply an attempt to recover the millions of pounds we have paid upfront to deliver on time. Key to this is that our 2nd joint venture factory is approved. …”

Mr Graham requested urgent quality assurance assistance from David Moore (Mendix Technical lead), copying amongst others Mr Beard and Mr Townsend, for the second factory to be approved. He stated: “From their [Medpro’s] perspective they submitted this 3 weeks ago, however I haven't seen anything to suggest it's completed technical approval” and went on to say: “There is some urgency in these queries as a decision is to be made today which, if any, deal is to be pursued, and there are political considerations to at least one”.